Renault-Nissan, the strategic Franco-Japanese Joint Venture (JV), announced to discontinue its partnership with the Indian auto maker Bajaj Auto for sourcing of Ultra Low Cost (ULC) cars on September 25, 2012. The move came as the Renault-Nissan JV opted to turn to China and Russia for consolidating its position in low cost global passenger car market.
Affirming the company's change in policies, a spokesperson for Nissan Motors India said, “We have decided against further collaboration with Bajaj on a four-wheeler vehicle. Outside India, the Renault-Nissan Alliance is addressing 'price-entry' segments in many emerging economies, such as Indonesia, China and Russia. We are not going to provide any more product details at this time but we look forward to disclosing more information as we get closer to their respective production dates.”
According to the company, it has already introduced two low cost vehicles under the Venucia Brand called D40 and D50, through its Dong Feng – Nissan Motors JV in the Chinese auto market. Further, Renault-Nissan's collaboration with AvtoVAZ in the Russian low-cost passenger car market is already under way and the global alliance has devised plans to launch new products under the Datsun brand.
When enquired about the dissolution of the collaboration with Renault-Nissan, Rajiv Bajaj, Managing Director (MD), Bajaj Auto refused to provide any comment on the issue and underlined that he was unaware of the proceedings and has not been contacted by the Franco-Japanese JV.
Evidently, an agreement was finalised between Renault-Nissan and Bajaj Auto in 2009. As per the mutual consent, the Indian auto major carried the obligation to design, develop and manufacture low cost vehicles, which the Franco-Japanese alliance would then market in the country, under their brand name. Reportedly, Renault-Nissan JV declared the signing of a Memorandum of Understanding (MoU) with Bajaj Auto to implement their ULC vehicle project in 2010.
The Indian auto maker developed its ultra low cost RE60 mini car, which was meant to replace the three-wheelers in the country and unveiled it at the Auto Expo held in New Delhi in January 2012. However, Bajaj Auto remained unsure about the Renault-Nissan's intentions to market the product in the Indian passenger car market and other similar emerging markets across the globe.
Reportedly, the Indian auto major's concept passenger car was showcased in January 2008, which was believed to fetch a price tag of $ 3,000. The company's ULC project with Renault-Nissan was initially scheduled to be launched in the Indian market somewhere in 2011, but was postponed due to lack of agreement between the alliance in terms of design and pricing of the vehicle. It has been revealed that Renault-Nissan JV asked for pricing the ULC vehicle around $ 2,500, while Bajaj Auto was adamant on cutting the overall cost of ownership.
